Obama’s former White House adviser has been pled guilty to wire fraud. This is in connection to an alleged scheme to steal $218,000 from a school network that he helped create.
U.S. Attorney Damian Williams said in a statement “Seth Andrew, 43, a former White House advisor, admitted today to devising a scheme to steal from the very same schools he helped create. Andrew now faces time in federal prison for abusing his position and robbing those he promised to help.”
In 2005, Andrew founded Democracy Prep Public Schools in New York City 2005 and left the position to work for the Department of Education (DOE) in 2013.
The sentence could land Andrew up to 20 years in prison, according to the Department of Justice. He will be sentenced on April 14.
Andrew was arrested in April and accused of misappropriating the funds from his Democracy Prep charter school to secure a lower interest rate on a bank loan for a multimillion-dollar Manhattan apartment in 2019, prosecutors said.
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After his time in the DOE, Andrew would join the Obama White House in a senior advisor role for the Office of Educational Technology, according to the DOJ. In 2017, once he finished serving in the White House, Andrew severed all of his ties with School Network-1.
Each of the charter schools in School Network-1 had to maintain an “escrow” account that could only be accessed following the dissolution of the school, according to the DOJ. However, Andrew used his access to close the escrow accounts following his departure from School Network-1 and placed $218,000 into fraud accounts.
According to the DOJ, Democracy Prep Public Schools each had to maintain “escrow accounts” that were only meant to be accessed if the school dissolved. Andrew, according to the statement, had access to these accounts and closed them out when he left the school system. He then placed the money in different accounts that the department labeled “fraud” accounts.
Prosecutors said he enacted his scheme to take money from the network in 2019, using three school escrow accounts that he was originally a signatory for. He closed out the accounts on separate dates and moved the funds into different accounts, pocketing interest on them until he moved the money into a bank account in the name of a civic organization he controlled.
At the time of his arrest in April of last year, prosecutors said he used that bank account “to obtain savings on a mortgage for a multimillion-dollar Manhattan apartment.”
“Locking into the lowest interest rate when applying for a loan is certainly the objective of every home buyer, but when you don’t have the necessary funds to put down, and you steal the money from your former employer to make up the difference, saving money in interest is likely to be the least of your concerns,” FBI Assistant Director William F. Sweeney Jr. said at the time.
Sources: Daily Caller, Yahoo News, CNBC, New York Post, The Hill